FNBO Direct Followed Suit, Up Interest Rate

After having been cut rates continuously since last September when the Federal Reserve began the current rate reduction campaign, some banks seem to start to reverse course in order to compete for our money even when the Fed is idle.

Since April, E-Trade Financial and HSBC Direct each bumped up the interest rate of their savings account. Today, FNBO Direct followed suit, announcing that it has increased the yield of their online savings account from 3.25% APY to 3.50% APY.

Unfortunately, even with three banks so far decided to increase rates, this didn’t make a trend. In fact, when I checked those banks listed in my interest rate table, I found that quite a few banks kept slashing rates. And what bothers me the most is that my newest bank, Capital One, also dropped their rate from 3.75% APY to 3.50% Right after I posted that I opened a Capital One Online Savings Account, I got this comment from Tom:

Capital One does offer great rates but I find them to be too inconsistent. One week they will have high rates and a month later, they don’t even rank in the top ten. Go figure.

Well, it doesn’t take me long to figure out what “too inconsistent” means in this case. And it also makes me think whether my rate chasing is worth it or not. I have opened one bank account after another, hoping to get the most of my money. In the end, looks like everybody is the same. All the rate chasing is just a waste of time.

To “punish” Captial One for dropping their rate, I will move my money from the new Capital One account to FNBO Direct. See, there’s still one “benefit” of having some many bank accounts: I can move my money around at any time

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